GHL: How FBN’s failure to pay for supplies almost claimed 93 lives on oil rig

General Hydrocarbons Limited (GHL), an oil firm, says First Bank of Nigeria’s (FBN) failure to pay its pending requests according to contract terms led to an international incident in 2023, which nearly claimed the lives of 93 persons working on the oil rig.

The energy firm spoke in a statement on Tuesday, responding to FBN’s allegations bordering on diversion of funds.

According to GHL, on October 7, 2023, the drilling rig Blackford Dolphin ran out of fuel, food, and other critical supplies with 93 people on board — a critical situation that almost led to a distress call.

The company said during the life-threatening incident, both the managing director (MD) and executive director of the bank were reportedly abroad.

But Olusegun Alebiosu, the current MD, who was then the chief risk officer (CRO), acted on behalf of the managing director when GHL brought the matter to his attention.

GHL said Alebiosu then called suppliers and service providers one after the other and promised to pay within three days.

Based on FBN’s assurances, the service providers made emergency supplies, but GHL said the payment never came.

In a bid to ensure the safety of life and continuing security at 75KM offshore Nigeria, GHL said it entered an irrevocable third-party payment order with one of the off-takers to pay the suppliers directly, a move that helped stabilise the operation.

The oil company said FBN has continued to refer to its intervention as a diversion of funds without providing any evidence—even after proof of payments to suppliers was subsequently provided to the bank.

GHL insisted that all contracts and invoices were duly vetted and paid by FBN through their credit and risk teams, thereby rendering any claims of “fund diversion laughable”.

The oil firm said FBN’s repeated failures to effect timely payment for invoices within the contractual framework of five days became 70 days or not at all, “a clear breach of its tripartite obligations”.

For emphasis, the letters of the agreement stipulated that “The Bank shall, where GHL has satisfied all conditions precedent to disbursement under the Facility Agreement, disburse all of or part of the Facility Amount to GHL not later than 5 (five) Business Days after GHL makes a utilisation request in accordance with the terms of the Facility Agreement”.

‘WE PAID SUPPLIERS TO SAVE 93 PERSONS ON BOARD RIG’

GHL explained that it paid the suppliers and acted to save the 93 persons onboard the rig, most of whom were foreign nationals, who had begun contacting their embassies and home governments.

The organisation said the move was also to save Nigeria from an international incident offshore.

“We will meet FBN in court with Daily Reports and log details to debunk this continuing misinformation of diversion,” GHL said.

The feud between FBN and GHL may come across as one of the biggest loan agreement disputes witnessed in the country.

Both companies had entered into a subrogation agreement on May 29, 2021, which required the bank to provide capital to the oil company for the development of OML 120, with proceeds shared equally.

However, in a statement on Tuesday, First Bank accused GHL of “diverting” the proceeds after off-taking crude from the floating production storage and offloading (FPSO) vessel.

GHL has since denied the claims.